Budgets can do wonders for you and your finances, if they actually work. Many people try to budget, but ultimately give up on it after a few month. There are many different factors that go into the effectiveness of a budget, but a few things stand out as the most common. Here are a few of the most common issues people have with budgets and some tricks for fixing it!
A personal budget always fails if you went into it with unrealistic expectations. A budget, no matter how strict, won’t help you bank a million bucks in a few months (unless you have that kind of income). In order to have a budget that works for you, try resetting your expectations. If you are not reaching the savings expectations you wanted, it may simply be because your income and expenses do not allow for it.
No Adjustments Made
Budgets are meant to be flexible. Something that looked good on paper three months ago may not work for you now. Revisit your budget every few months to see if its still working for you. If it’s not, make adjustments! Remember, a budget is supposed to work for you, not against you. As long as you’re able to hit the realistic goals you set, then it’s working for you just fine.
Not Attached to Personal Goals
If you have not attached your budget to personal goals, you’ll be in trouble. It’s hard to stay motivated and accountable to a budget if there is nothing in it for you. If you have a budget in order to save more money, what are you saving for? Tie it to something personal like a vacation, an emergency fund, or funds to pay down debt. The closer your budget is tied to things that you want to achieve, the more likely you are to stick to a budget and make those things happen.
Irregular Spending Not Accounted For
Your budget may seem broken if you have not accounted for irregular spending. Do you only pay car insurance every quarter? Are there months where birthdays/anniversaries/outings happen more than any other time? It’s easy to forget about these instances, but they do factor into your spending. Try reevaluating your budget and factor in all kinds of irregular spending. Then give the budget another shot. It’s better to overestimate spending. The extra money you’ll end up with at the end of the month can be a nice addition to a savings account or to treat yourself for sticking with it.